Comments on: How did we get into this real estate mess? Lets Blame Lyndon B. Johnson http://www.bostonreb.com/2009/07/how-did-we-get-into-this-real-estate-mess-blame-lyndon-b-johnson/ Boston real estate, Boston condos, Boston luxury condos, Boston luxury real estate, Back Bay condos, Back Bay real estate, Back Bay luxury condos, Boston Back Bay condos Mon, 06 Feb 2012 05:38:19 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: BubblesRUs http://www.bostonreb.com/2009/07/how-did-we-get-into-this-real-estate-mess-blame-lyndon-b-johnson/comment-page-1/#comment-10105 BubblesRUs Sat, 04 Jul 2009 02:19:23 +0000 http://www.bostonreb.com/?p=20311#comment-10105 A lot of what Alyssa has to say is interesting to set the context of the real estate bubble. However, I see nothing about the Fed dropping the discount rate to historical low levels in 2002. This move forced down mortgage rates over the next 2 years by about 30%. Cheap mortgage money means home prices will go up with everything else being equal. The craziness with sub-prime and Alt-A mortgages didn't really get going until 2004 and 2005. This craziness was driven by one thing: greed. Wall Street, banks, mortgage companies, Fannie, Freddie, and home owners all got caught up in the frenzy based on the mistaken belief that real estate always goes up in price. Government cheerleading for home ownership certainly help puff up the bubble, but it wasn't the main cause. The actual cause is human nature. People really like financial bubbles, at least while they are puffing up. A lot of what Alyssa has to say is interesting to set the context of the real estate bubble. However, I see nothing about the Fed dropping the discount rate to historical low levels in 2002. This move forced down mortgage rates over the next 2 years by about 30%. Cheap mortgage money means home prices will go up with everything else being equal. The craziness with sub-prime and Alt-A mortgages didn’t really get going until 2004 and 2005. This craziness was driven by one thing: greed. Wall Street, banks, mortgage companies, Fannie, Freddie, and home owners all got caught up in the frenzy based on the mistaken belief that real estate always goes up in price.

Government cheerleading for home ownership certainly help puff up the bubble, but it wasn’t the main cause.

The actual cause is human nature. People really like financial bubbles, at least while they are puffing up.

]]> By: How did we get into this real estate mess? Blame Lyndon B. Johnson http://www.bostonreb.com/2009/07/how-did-we-get-into-this-real-estate-mess-blame-lyndon-b-johnson/comment-page-1/#comment-10093 How did we get into this real estate mess? Blame Lyndon B. Johnson Fri, 03 Jul 2009 19:41:33 +0000 http://www.bostonreb.com/?p=20311#comment-10093 [...] News Sources wrote an interesting post today onHere’s a quick excerptHow did we get into this housing mess, anyway? In her new book, author Alyssa Katz argues that ‘delusional thinking’ set the stage for the current crisis. You may want to add this to your summer reading list: “ Our Lot: How Real Estate Came to Own Us.” Here’s an interview with the author. If you want to understand how we got into the current housing disaster, author and journalism professor Alyssa Katz has some ideas about the decisions that led us here, starting way back in the Johnso [...] [...] News Sources wrote an interesting post today onHere’s a quick excerptHow did we get into this housing mess, anyway? In her new book, author Alyssa Katz argues that ‘delusional thinking’ set the stage for the current crisis. You may want to add this to your summer reading list: “ Our Lot: How Real Estate Came to Own Us.” Here’s an interview with the author. If you want to understand how we got into the current housing disaster, author and journalism professor Alyssa Katz has some ideas about the decisions that led us here, starting way back in the Johnso [...]

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